Episode 09 – Your Business and the Law with Maushami Chetty

























Episode 09: Maushami Chetty | Founder & CEO Aarya Legal
If you have been following our podcast, you will know that all our previous episodes featured entrepreneurs who shared their entrepreneurial journeys. This episode is different in that this is our first episode in our new category called 'Business Tips and Tools'. So we have 2 categories on this podcast - 'The Journey' and 'Business Tips and Tools'. Our first guest in this series is Maushami Chetty from Aarya Legal. Although Maushami is a serial entrepreneur herself, the focus of this interview was not on her journey, but rather on the legal aspects of starting and growing a business.

Maushami Chetty is an attorney with over 14 years post qualification experience and a speaker and consultant on gender and cultural change in business and schools. She has been a judge for the Gender Mainstreaming Awards and Oliver Empowerment Awards. She is the founder and CEO of Aarya Legal, a legal consulting firm that provide a full service solution for transforming your business. They do not only provide you with a BBBEE strategy and implement the legal structure, they can also help you assess and implement your transformation goals.

Show Notes
Maushami is currently running a campaign called 250-in-60, which aims to provide legal education to 250 entrepreneurs globally in 60 days. Through her experience she has seen many small businesses fail because they didn't have the proper legal structures in place. In our interview she talks about her checklist she uses to assist businesses to assess what they need in terms of legal structures, in relation to the long term vision they have for their business. According to Maushami, this is a critical first step when thinking of starting your own business, as having the wrong structures in place can be costly in the long run.

In her interview, Maushami talks about the difference between registering as a sole proprietor versus a private company. The key message here was that a private company is a separate legal entity and should therefore be treated at arms length from you as the business owner. Maushami suggests that business owners of private companies have an agreement with their business detailing how they will be allowed to draw from the business. She warns that drawing on your company account for personal expenses is dangerous and is not correct trading. One of the dangers of running your business accounts for personal affairs is that, in the event your business runs into financial difficulty, a judge could deem your use of the business funds as abuse of form, thereby ruling that you are liable in your personal capacity for the company's debt. This is known as 'piercing the corporate veil'. On the other hand, as a sole proprietor, you are in effect the business, and so anything you own can be attached by your creditors. If you are unsure which form is best for your business, an assessment by a legal adviser is your best recourse.

However, Maushami acknowledged the high cost of legal services and the tendency for business owners to shelf this expense as one that is unnecessary. She advises that business owners should really start caring about their businesses by thinking and planning for worst case scenarios, and structure their businesses upfront to protect themselves.